BSE SME IPO Index

On the Bombay Stock Exchange (BSE), the BSE SME IPO is a strategy index. It records the performance of a certain subset of small and medium-sized businesses (SMEs) following their listing on the BSE SME platform or following the conclusion of their IPO. It is the only index in India that has monitored the performance of recently listed SMEs for more than a year. 

A diverse index of 43 equities covering 12 sectors, Healthcare, Housing Related, Capital Goods, Consumer Durables, FMCG, Chemical & Petrochemical, Tourism, IT, Finance, Oil & Gas, Media & Publishing, and Metal, Metal Products & Mining makes up the S&P BSE SME IPO index. 

History of BSE SME IPO

Launched on December 14, 2012, the S&P BSE SME IPO index had a base value of 100 and a first value date of August 16, 2012. The share price of the S&P BSE SME index has surpassed 12,000 at about 29.82x P/E multiples since its launch. 

Management of BSE SME IPO

The S&P BSE Index Committee, established under Asia Index Private Ltd., a joint venture between S&P and BSE Ltd., is responsible for overseeing and managing the S&P BSE SME IPO index. The SME Index BSE is calculated in two currencies: INR and USD; for USD, spot foreign exchange rates are applied from Refinitiv’s data.
 

BSE SME IPO Stocks Selection Criteria

The following requirements must be met by the BSE SME IPO index stocks for them to be included in this index: 

• Must be based in India and have just been listed on the BSE SME marketplace.
• Must have a post-issue capital of at least ₹1 crore and not more than ₹25 crore to be listed on the BSE SME platform.
• On the second day of its listing, it ought to be mentioned.
• It should be removed from the index following a year of listing.
• There should always be a minimum of 10 stocks; if there is a shortage, the firm stock's exclusion is postponed until another suitable stock is located.
• It should only consist of the SME IPO businesses' common stocks.
• Public issues that are not resolved are not eligible to be included in the index.
• Even if the stock has not finished a full year of listing on the BSE SME platform, it should be removed from the index on the day the index stock migrates from the BSE SME platform to the BSE Mainboard platform.

How is BSE SME IPO Value Calculated?

The index value is calculated as follows:

Index value = Index Market Value / Divisor

Where,

Index Market Value = Price * Shares * IWF (Float Factor)

Divisor after rebalancing = Market Value after rebalancing/Index Value before rebalancing 

The BSE SME IPO index fund is reconstituted every month, which becomes effective on the Monday that follows the third Friday of each month.